Duguay: Confidentiality clauses should go

Auditor General Dan Duguay thinks confidentiality clauses have no business in most agreements signed by Government.

In the Auditor General’s special report on the Cayman Islands Government’s Hurricane Ivan property insurance settlement, Mr. Duguay noted there was a confidentiality clause in the contract between the government and Cayman General Insurance.

‘This confidentiality clause required both sides, including the Government, not [to] disclose the details of the terms and conditions of the agreement to anyone other than its various advisors,’ the report stated.

Mr. Duguay wilfully did not abide by the confidentiality clause in writing his report.

‘I believe that my office is not covered on the terminology of the wording of the agreement,’ he wrote. ‘I am not a professional business, ‘accounting and legal advisor’ for the Government.’

Mr. Duguay pointed out that both the Constitution of the Cayman Islands and the Public Management and Finance Law ensure that his office maintains a required degree of independence from government operations.

‘More specifically… the Public Management and Finance Law allows me to conduct investigations into the economy, efficiency and effectiveness with which any ministry, portfolio, the Office of the Complaints Commissioner, statutory authority or government company has used its resources in discharging its function.’

Mr. Duguay said it was critical for the openness and transparency of government operations that the Auditor General’s office not be restricted in any way with regard to the items it reports on.

‘If confidentiality clauses such as [the one in the agreement with Cayman General Insurance] were to have the ability to restrict the right of my office to review such transactions, I believe that the Legislative Assembly and the people of the Cayman Islands would be ill-served,’ the report stated.

The Audit Office was extremely concerned that the government would sign contracts with confidentiality clauses.

‘One of the government’s strategic policies is to have openness and transparency in its operations,’ Mr. Duguay stated in the report. ‘In my opinion, the inclusion of confidentiality clauses in contracts is fundamentally inconsistent with these principles and the principles enshrined in the Public Management and Finance Law.

Mr. Duguay said the Government accepted less in insurance proceeds that it was entitled to in the settlement with CGI. Although he believes the government made this decision based on what it perceived was the best interests of the Cayman Islands, it still had an obligation to be open and accountable for the decision.

‘A confidentiality clause seeks to make this and similar transactions less accountable,’ the report stated. ‘I believe that they have no place in government agreements except in the very limited case of national security.’

Mr. Duguay called on the Public Accounts committee and all the members of the Legislative Assembly to make a clear resolution banning confidentiality clauses in government contracts except in the very limited case of national security.

Speaking about the report last Friday, Mr. Duguay said this was not the first time he had encountered confidentiality clauses in government contracts, and other auditor generals have seen it too.

‘Auditor generals don’t see this as a viable way of going forward,’ he said.

Public Accounts Committee Chairman Osbourne Bodden said he fully agreed with the Auditor General’s suggestion.

‘We had a Public Accounts Committee meeting [last Thursday] and we brought this up,’ he said. ‘Everyone was in favour of not having confidentiality clauses – the government members and the opposition members.

‘Having a confidentiality clause in something like [the government’s agreement with CGI] should be a no-no.’

Mr. Bodden said the Public Accounts Committee’s report on the Auditor General’s report will make it clear that the PAC supports Mr. Duguay’s views.